TALON SPORTS (PVT) LTD. PAKISTAN: CORPORATE INTELLIGENCE AND SUPPLY CHAIN DUE DILIGENCE REPORT

I. Executive Summary and Strategic Positioning

TALON SPORTS (PVT) LIMITED (Talon Sports), established in 1990 in Sialkot, Pakistan, is a leading, vertically integrated exporter specializing in the manufacturing of sports goods, sportswear, and footwear. The company's financial structure, operational scale, and pioneering role in ethical manufacturing position Talon Sports as a **high-reliability Tier 1 supplier** for international brands. The company’s reported annual turnover is **US$25 million**.

1.1. Strategic Positioning and Market Context

Talon Sports’ core competitive advantage, distinguishing it from other Sialkot-based manufacturers, stems from its deep commitment to sustainability and ethical compliance. The firm holds the distinction of being the first manufacturer of sports balls approved by international Fair Trade Organizations (FLO) in 2002. This pioneering role is critical for the company's risk management and its strategy to access ethically sourcing buyers in Western markets. This long-standing Fair Trade commitment is more than just a marketing claim; it represents a high barrier to entry, requiring continuous auditing, high management costs, and paying a **20% premium on the manufacturer's cost**. This indicates that Talon Sports targets premium, ethics-focused buyers (e.g., COOP UK) who prioritize supply chain integrity over marginal cost savings. This strategy shields the company from the volatile, low-margin segments of the market.

1.2. Key Findings and Risk Assessment

Talon Sports stands out due to its investment in worker welfare. It pays a **living wage** instead of the minimum wage and provides free lunch and free transportation. Most notably, it offers free primary, secondary, and tertiary level healthcare for its employees and their families, reaching over **20,000 people in 56 villages**. This level of social program significantly mitigates social compliance risks common in the region. Export volume is high, concentrated in key markets like the United States, the United Kingdom, the Netherlands, and Russia. However, a significant inconsistency was identified in third-party employee count data. While audit capacity and Fair Trade documentation point to approximately **1,200 employees**, some external data collection services report only 1-10 employees. These low figures should be assumed to belong only to the US or administrative office personnel, rather than a large manufacturing facility.

*Note: A separate company, 'Talon Esports,' an e-sports organization established in Hong Kong in 2017 and led by Xiao "Sean" Zhang, should not be confused with the subject of this report, the Pakistan-based manufacturer Talon Sports (Pvt.) Ltd.*

II. Corporate Profile and Management Structure

This section verifies the company's legal basis, physical footprint, and corporate leadership.

2.1. Company Registration and Legal Status

Talon Sports is registered as a private limited company (PVT LTD) under the Companies Act, 2017, regulated by the Securities and Exchange Commission of Pakistan (SECP). Its establishment in **1990** confirms over 30 years of continuous operation and a strong track record in the international market. The company's main manufacturing and corporate headquarters are located at Daska Road, Sialkot 51310, Punjab, Pakistan. Additionally, a corporate office address and phone number (42188 Rio Nedo, Temecula) are maintained in the USA to facilitate closer coordination with North American buyers. This global footprint demonstrates the company's capacity to trade with major international markets.

2.2. Leadership and Industry Influence

Talon Sports’ leadership holds high-profile positions within Sialkot's business community and at the national level.

• **Chaudhry Saleem Baryar (Chairman):** As Chairman of the Talon Group, he was honored by the President of Pakistan with the Top Award in 2015 for securing the "Largest Order to Date." This confirms the company's success in managing large, complex, and high-volume global contracts.
• **Qaiser Iqbal Baryar (CEO/Director):** He holds senior positions in local trade organizations like the Sialkot Chamber of Commerce & Industry (SCCI). This integration into the core decision-making mechanism indicates Talon is a central part of Sialkot's export strategy, offering significant advantages in supply stability and reduced regulatory friction.

III. Operational Capacity and Manufacturing Excellence

Talon Sports has the capability for large-scale and high-quality production thanks to its **vertical integration**, extensive facility area, and modern machinery park.

3.1. Infrastructure and Technology Scale

The company operates in facilities spanning over **100,000 square feet**. The structure is fully vertically integrated, featuring multiple production units equipped with **950 machines** and an Integrated Enterprise Resource Planning (ERP) System. Talon's control over multiple stages of the production chain (material sourcing, cutting, stitching, finishing) allows it to optimize quality control and ensure critical social compliance standards are consistently met in-house. This capacity reduces reliance on outsourced subcontractors, minimizing supply chain risks for Tier 1 brands.

3.2. Product Diversity and Specialization

Talon Sports’ product portfolio spans three main areas: sportswear, athletic footwear, and sports balls.

• **Sportswear and Textiles:** Key knitted items include soccer uniforms, tracksuits, rain jackets, and polo shirts. The use of high-performance fabrics like 88% Polyester and 12% Spandex/Lycra Elastane shows competence in the modern, technical athletic apparel market.
• **Sports Balls:** Production covers Professional Match Balls, Machine-Stitched Training Balls, rugby, basketball, and volleyballs. Capacity is reported to be split **50/50** between sports balls and apparel.
• **Specialized Footwear and Equipment:** Talon Sports is the **only athletic footwear manufacturer** using three ethical and eco-friendly labels simultaneously: **Fair Trade, Organic Cotton, and FSC**. They also produce niche items like Strongman Sandbags.

3.3. Production Capacity and Labor Structure

The company's estimated capacity for sports ball production is **700 to 1,000 units per day** (18,000 to 26,000 units per month). The stated workforce when receiving Fair Trade certification in 2002 was approximately **1,200 factory workers** and contract stitchers. The low 1-10 employee data reported by some external platforms should be definitively disregarded as it does not reflect the US$25 million turnover or the labor-intensive production strength.

IV. Global Trade, Market Dynamics, and Financial Performance

4.1. Financial Status and Awards

The company’s annual turnover is **US$25 million**. Talon is a significant medium to large-scale manufacturer within the Sialkot export cluster. Awards include the **Top Apparel Awards for 10 consecutive years** and the **Employer of the Year Award in 2016**, demonstrating consistent excellence in the apparel department.

4.2. Export Market Analysis

Talon Sports has executed **2,768 shipments to 164 buyers**. The most significant primary markets are the USA, UK, and the Netherlands. Recent trade data highlights the main export products as **woven jackets, shorts, and trousers**, confirming that technical apparel is now a significant or dominant revenue stream.

The high US market value underscores reliability. Diversification into markets like Russia should be monitored for potential commercial risks tied to global political sanctions.

V. Ethical Supply Chain and Corporate Social Responsibility (CSR) Leadership

Talon Sports' industry-leading ethical compliance programs function as the primary **risk mitigation mechanism** for international supply chain partners in Western markets.

5.1. Pioneering Compliance Framework

• **Fair Trade Certification:** First sports ball supplier certified in 2002. Criteria ensure good working conditions and a **living wage**.
• **Multi-Label Compliance:** Only athletic footwear manufacturer using three labels: **Fair Trade, Organic Cotton, and FSC**.
• **Auditing and Monitoring:** BSCI compliant and actively participates in ILO-IPEC (now IMAC) for combating child labor.

5.2. Living Wage Model and Worker Welfare

The company provides a **living wage** (above minimum wage). Fair Trade ball workers receive **50% more** than the standard rate. The **20% Fair Trade premium** is democratically managed and invested in community socio-economic improvement projects.

5.3. Comprehensive Health and Social Support Programs

This commitment far exceeds regional norms and is a strategic asset for labor stability.

• **Subsidies:** 100% Subsidized Food (free lunch) and Free Transportation.
• **Healthcare:** Free Primary, Secondary, and Tertiary Level Healthcare for workers and their families via two full-time doctors and four contracted hospitals.
• **Community Reach:** The program covers over **20,000 individuals across 56 villages**, a high-cost investment demonstrating commitment to worker retention and social risk reduction.